What is a Customer Data Platform (CDP)? understand the basics

I recently moved to a new room and have been searching for the perfect sofa for my new home. And yesterday, I finally found it! 

It was hard to find, though. There are countless communication channels and services I used to buy a sofa. We visited Google Search, Google Shopping, Amazon, social media, multiple e-commerce sites, and even physical stores.

I can’t say that the road to purchase was smooth. In fact, most online shoppers follow a similar path. You’ll bounce back and forth between your brand’s e-commerce site or blog, your platform’s product listings, and your brick-and-mortar store. So how can a company keep track of all these customer touchpoints? 

That’s where a customer data platform, or CDP, comes into play. In today’s world, where there are a huge number of touchpoints with customers and a myriad of communications, CDP can be used to centralize and understand customer awareness and needs. We have created this guide to introduce you to CDP. Be sure to bookmark this page for future reference. You can also go to each chapter from the links below.

CDP

Table of Contents

  1. What are CDPs?

  2. What is Customer Data?

  3. Comparing CDPs and CRMs

  4. Comparison of CDPs and DMPs

  5. Key Benefits of CDP

  6. Leading CDP software

According to the CDP Institute , an organization that helps marketers manage customer data , CDP is defined as “packaged software that builds a centralized, persistent database of customers that is accessible from other systems.” It has been.

Customer data platforms combine data from a variety of first-, second-, and third-party sources to build customer profiles. These sources range from your own CRM or DMP (data management platform), trading systems, web forms, emails and social media posts, websites, e-commerce behavioral data, and more.

The information provided by CDP is very useful for people-based marketing . At HubSpot, we also believe in the “customer” centricity of the flywheel . CDP is also effective when promoting similar initiatives at your company. 

What exactly is “customer data”?

CDP’s interest is driven by the critical importance of customer data to business and marketing operations. So what exactly is customer data? 

Customer data refers to information that remains as a customer’s behavior history, such as Internet usage and communication with companies online or offline. This includes communication via websites, blogs, e-commerce sites, as well as in-store interactions (I’ll go into more detail on some examples later). Customer data is extremely valuable to businesses, but things like the recent EU General Data Protection Regulation (GDPR) are changing how businesses and organizations collect and manage this data.

There are four main types of customer data collected and organized by CDP:

1. Identification data

Identification data is the basis for each customer profile stored in CDP. Having this kind of data also allows companies to identify each individual customer and avoid unnecessary data duplication. Identification data includes: 

  • Name information: surname, first name
  • Demographic information: age, gender, etc.
  • Address information: house number, city, zip code, etc.
  • Contact information: phone number, email address, etc.
  • Social media information: Twitter account, LinkedIn address, etc.
  • Occupational information: job title, company name, etc.
  • Account information: User ID used by the company, account number, etc.

2. Detailed data

Detailed data is information that expands the content of the identification data to give a more detailed picture of the customer. The categories of detailed data will vary depending on the type of company.

For example, a car dealership might collect lifestyle information about their customers’ cars. A diaper manufacturer, on the other hand, would collect data about the number of children in a household. Detailed data includes:

  • Employment history information: previous employer, industry, income, job level, etc.
  • Lifestyle information: type of residence, owned cars, pets, etc.
  • Family information: number of children, marital status, etc.
  • Hobbies: Subscribed magazines, membership fitness clubs, etc.

3. Quantitative or behavioral data

Quantitative data is information that allows you to understand how each customer interacts with your company through specific behaviors, reactions, or transactions. Quantitative data includes:

  • Transaction information: quantity and type of products purchased or returned, number of carts abandoned, date of order, etc.
    • This information also includes RFM analysis . RFM analysis includes the last purchase date R ecency: when was the last time this customer made a purchase), purchase frequency ( Frequency : how often does this customer purchase), and purchase amount ( Monetary value: this It is a method of analyzing customers based on how much they spend in one purchase) .
  • Email communication information: number of emails opened, number of email click-throughs, number of responses to emails, date of response, etc.
  • Online behavioral information: website visits, website click-throughs, product views, social media usage, etc.
  • Customer service information: contact date, content of inquiry, contact person, etc.

4. Qualitative data

Qualitative data can be said to add context or character to customer profiles. This kind of data includes information about the motivations, opinions and attitudes expressed by a company’s customers. It does not matter whether the information is relevant to the company in question. Qualitative data includes: 

  • Motivational information: Questions like “How did you hear about us?”, “Why did you buy this product?”, “What made you choose this product over others?” answer to
  • Opinion information: “How would you rate this product?”, “How would you rate our customer service?”, “ How likely would you recommend our company to others?” answers to questions
  • Preference information: preferences regarding colors, animals, materials, foods, etc. 

From the above description, CDP collects and organizes a wide range of data. However, it is important to note that most of the specific data and data categories vary by business and industry.

Now, before we dive into the details of CDP, let’s clarify how CDP differs from other solutions.

 The main differences between CDP and CRM are:

  1. CDP also collects anonymous visitor data , whereas CRM information is limited to known or potential customers.
  2. A CDP analyzes the person’s various behavior histories and customer journeys , while a CRM basically analyzes the pipeline and forecasts for a particular opportunity.
  3. CDPs track both online and offline customer data , while CRMs cannot collect offline data without input.
  4. By working with multiple data points from diverse sources , CDP reduces the chance of data duplication or omission. On the other hand, CRMs that collect data from individual entries can lose data or misclassify it due to processing errors.

The main differences between CDP and DMP are:

  1. While CDPs reach across all types of marketing , DMPs primarily help improve targeting and audience reach in the area of ​​advertising.
  2. CDPs primarily collect first-party data (directly from the source) , while DMPs primarily collect third-party data (via data providers, data controllers, and data service providers).
  3. CDPs reflect specific customer identifiers that can identify an individual (e.g., name, email address, customer ID), while DMPs reflect anonymous customer identifiers (e.g., cookies).
  4. CDPs retain data for longer periods to build detailed and accurate customer profiles and foster customer relationships , while DMPs retain data for shorter periods to target ads and build lookalike audiences. only hold.

There are a lot of acronyms in the marketing industry, but I hope this gives you an overview. Next, let’s dig into what are the reasons for considering using a CDP.

Key Benefits of CDP

Implementing a CDP complements your existing software and marketing efforts to improve your organization and build better relationships with your customers. Deploying a CDP has the following key benefits:

Avoid data silos

A “data silo” is data that is available to one department but isolated from the rest of the organization.This occurs when data cannot be shared sufficiently due to rapid expansion of the business scale, or when the system cannot adapt to changes. Siled is not a good thing. The downsides include difficulty in internal collaboration, reduced organizational agility and productivity, and inaccurate customer profile data. 

With a CDP, you can avoid data silos. By centrally managing customer data, you can maintain data accuracy and ensure data availability for all employees.

“Every employee must have some form of access to customer data. Marketing needs customer data for analytics and attribution purposes. is critical to customer data to close deals faster.Finance and operations rely on customer data to understand payment trends and buying behavior.Customer data platforms are the tools you use. It’s one of the key infrastructures that enables us to collect and leverage customer data consistently across the enterprise, regardless of age.” — Peter Reinhardt, CEO , Segment

Collect data directly from your audience

The world is full of huge amounts of data. So how can you be sure of the accuracy of your data? This requires first-party data, i.e. data collected directly from customers, website visitors, social media followers, registered users, etc.Data gathered directly from your own audience is also the best way to guide your marketing decisions.

CDP collects first-party data primarily through tracking tools such as pixels. Therefore, the audience information reflected in the CDP can always be expected to be highly accurate.

help you get to know your customers

To practice customer-centric marketing, you first need to know your customers. Luckily, CDP builds customer profiles so that we can get a deep understanding of each customer.Such information can also be used for customer behavior analysis and the creation of customer identification graphs.

With CDP, you can manage your customer relationships and market accurately and effectively with your audience in mind.

Centralize cross-channel marketing activities

It’s not uncommon to run multiple marketing activities in parallel. It takes time and effort to share the data used and collected for each measure, and to discuss and discuss the content.

CDP is useful in such situations. CDP helps you centrally manage initiatives across multiple channels by providing accurate, organized and integrated data. It can also be used to collect and adjust new data that will serve as a reference for other ongoing initiatives.

Leading CDP software

There are many CDP software available for companies of all shapes and sizes. Here are some of the most popular software to help you get started.

  1. Segment is a CDP that collects and centralizes customer data from multiple online channels and sources. It is characterized by a unified view of the entire customer journey across various touchpoints. Connect customer data across 300+ marketing, analytics and data warehouse tools.
    Pricing : There are 3 plans: Free, Team, and Business. The Free plan is free for life, but has limited features. Team plans start at $120/month, with customization pricing on the most comprehensive Business plan.
  2. Emarsys is a CDP that collects and analyzes data from various sources for an omnichannel approach. Capabilities include reporting and analytics, cross-channel automation and personalization, and vertical solutions (including e-commerce, travel and retail).
    Price : There are 3 levels of price: Essential, Advanced, and MAX AI. The price of each plan varies depending on the industry. You must request a quote from Emarsys .
  3. Exponea is a comprehensive CDP primarily targeted at e-commerce and B2C companies. This CDP solution combines and tracks online and offline data from various channels and sources to present a single view of each customer and create personalized campaigns.
    Pricing : CDP, Email, and CDXP come in three different packages, each with features tailored to the type of business they serve. Each package has 3 different bundles: Grow, Scale and Enterprise. Prices are not published on Exponea’s website. I need to ask the company for a quote .
  4. Optinmove is a relationship marketing platform with CDP at its core. Collect, segment, and analyze customer data to derive actionable insights. A solution for creating, tracking and optimizing personalized multi-channel campaigns.
    Price : Customized according to the number of customer networks to operate and the number of customers registered in each database. Request a demo and quote from Optinmove .
  5. Tealium AudienceStream CDP is a platform that helps you build trust with your audience and build comprehensive customer profiles. Data stored in customer profiles can be leveraged to determine potential business size, derive key relationship-building information, and identify metrics for audience segmentation.
    Pricing : Like many CDP software providers, Tealium AudienceStream does not offer fixed price packages. I need to ask the company for a quote .

Site where you can search for CDP service providers

Did you understand how to use CDP? Using a CDP to better understand your customers and market to them has many benefits . Here are some reliable sites that you can refer to when choosing CDP software.

  • CDP Institute’s CDP Service Provider Directory . This list includes “companies that provide CDP-related consulting, implementation, agency services, data and technology.” Also includes CDP Institute partner companies.
  • Best Customer Data Platform (CDP) Software Ranking by G2 Crowd . This is one of G2’s review pages, which has a reputation for objectivity. As with other review pages, you can filter by organization size and star rating. You can also sort by satisfaction, popularity, and G2 score.
  • Capterra’s Best Customer Data Platform Software ranking. You can narrow down your CDP products using various filters such as price, popular features, number of users, and deployment type.

Customer-driven marketing utilizing customer data

No business can exist without customers. Customers are at the center of all business activities, especially marketing. And a customer-centric business needs “raw” customer data that reflects reality.

With a customer data platform, you can ensure the freshness, accuracy, and consistency of the data you need to build internal consensus, generate marketing ideas, and build trust with your customers. It may be a good idea to consider using CDP software to advance your marketing.

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